Monday, April 14, 2008

Weakening labor market hits grads, says CUNA economist

MADISON, Wis. (4/14/08)--The weakening U.S. labor market may hurt the prospects of college students, especially those approaching graduation, a Credit Union National Association (CUNA) economist told a student newspaper, The Badger Herald Thursday.

About 80,000 jobs were lost in March nationwide, which comes on the heels of significant job losses in previous months, Steve Rick, CUNA senior economist, told the University of Wisconsin-Madison newspaper. The job market may not rebound as quickly as the economy, which should recover by late 2008 or early 2009, he added.

"Firms are historically slow to hire after a recession, preferring to increase the productivity of current workers," Rick told the paper. "So I expect the unemployment rate to keep rising through 2009."

However, prospects for student financial aid look better. Students should not have problems obtaining federally subsidized student loans, Mike Long, vice president of lending, University of Wisconsin CU, Madison, Wis., told the paper.

Although there might be slight reductions in financial aid, there should be sufficient money to lend because the federal government doesn't want to be an obstacle to students getting an education, Long said.

It actually might be a good time to be a student, because students don't have to worry about plummeting home values or pension funds, Long said. The current low interest rates are just what college students are looking for from financial institutions at this stage of their lives, he added.

It is important for college students to establish good credit with the current higher standards for obtaining loans, which students will need to purchase electronic gadgets, cars or homes after they graduate, Long concluded.

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